comment: Shafts of economic light may not reveal a recovery

At an informal meeting earlier this week with journalists over drinks and a Champions League semi-final, fund manager Martin Currie's chief investment officer James Fairweather put a date on the bottom of the troubles affecting the financial markets - March 17.

At an informal meeting earlier this week with journalists over drinks and a Champions League semi-final, fund manager Martin Currie's chief investment officer James Fairweather put a date on the bottom of the troubles affecting the financial markets - March 17.

That was when Bear Stearns got bailed out, following the Fed's drastic rate cuts and a bail for the monoline insurers the month before. It was when, some say, confidence started creeping back in.

This may be why Barclays Bank yesterday seemed so reluctant to commit to a rights issue such as that announced by RBS earlier this week.

Rbs asked shareholders for a £12bn cash boost after revealing an extra £5.9bn of investment writedowns for this year, in addition to the writedowns announced in February Analysts had been warning banks such as Barclays and Halifax Bank of Scotland would be forced to go cap in hand to existing shareholders to make up shortfalls in capital levels hit by writedowns.

But if the market has turned, Barclays may not have to.

At their annual meeting in London yesterday, shareholders demanded to know if they would. And although tight-lipped Barclays chairman Marcus Agius said raising new capital was "an option", the message was clear. Tthey would rather not. Not yet, at any rate.

At 5.1 per cent, its capital ratio may be below the 5.25 per cent target but the other option would be to grow the balance sheet.

"We will remain active managers both of our balance sheet, and of our capital ratios," said chief executive John Varley, mysteriously.

Part of the problem is knowing the extent of the damage. So far the world's biggest banks and securities firms have had credit losses and writedowns of Û290bn since the start of 2007.

But UK banks are lagging behind despite being asked by the Bank of England to 'fess up. Some say when the bank offered £50bn worth of government bonds for banks' mortgage-based assets, governor Mervyn King should have made banks come clean, but he just asked nicely.

That is why RBS's move to raise funds from shareholders wasn't considered a betrayal of stated aims, rather it was a decisive and honest assessment of the damage done.

Yet if hope may be springing, it is not possible to say we're out of the woods yet.

For one, the LIBOR rate, measuring the willingness of UK banks to lend each other money, must come down.

Until that spring of confidence leaks in to wet the banks' dried up liquidity, the economy will not move forward.

There is also a worry that while the financial markets have begun their recovery, the consumer-driven economy is seriously infected and due to get sicker still.

In the US particularly, credit has all but dried up, house prices are in the dumps, oil is Û120 a barrel, the job market is grim and food price inflation is rampant. Not good signs.

The US consumer still makes up 20 per cent of the world's GDP. It is now clear that credit will not be as easy to get as it was in the last two years. The likelihood is the patient may take a long time to recover yet.